Lantmännen reports record result for 2016 – and proposes record dividend

Tue, Feb 07, 2017 02:34 EST

Lantmännen’s result for 2016, after net financial items and adjusted for items affecting comparability, is the highest result Lantmännen has ever delivered and amounts to 1 548 MSEK. Thanks to the strong result, the Board has decided on increased refund and final price adjustment for Lantmännen’s owners, Swedish farmers. The Board’s full dividend proposal is the highest in Lantmännen’s history
.

”The high result is proof that Lantmännen continues to develop in a positive way and according to our strategy. Virtually all business have developed well during the year. We’ve strengthened our market positions and made important acquisitions that further strengthen our position and create new business opportunities,” says Per Olof Nyman, CEO and Group President of Lantmännen.

All figures below refer to operating profit for the full year of 2016, and are adjusted for items affecting comparability. Last year’s results in brackets.

The
Agriculture Sector
has substantially increased its result to 318 MSEK (237 MSEK). The improved result is largely due to an increased customer focus and strong local presence. Well-executed efficiency and cost reduction measures, which have reached full effect during the year, have also contributed positively. Lantmännen has strengthened its position in the competitive agricultural market, with increased market shares and strong sales numbers.

The result in the
Machinery Sector
amounts to 316 MSEK (255 MSEK). The sector has developed well during the year, both within agricultural and construction machinery. Intensive work has been carried out by Lantmännen Maskin Sverige, in order to prepare the organization for the updated supplier agreement with AGCO; among other things, AGCO’s central warehouse has been relocated to Malmö. Swecon delivers a strong result, and has increased its market shares in both Sweden and Germany.

The
Energy Sector’s
result amounts to 304 MSEK (218 MSEK). The higher result is primarily due to the fact that Lantmännen Agroetanol has increased its result considerably – especially through successful exports of climate-friendly ethanol to Germany, and through increased sales of more highly-refined products – for example the ED95 fuel for diesel engines. Lantmännen Reppe and Lantmännen Aspen have also strengthened their positions and further improved their results.

The
Food Sector
has increased its result to 849 MSEK (733 MSEK). The higher result is mostly explained by continued result improvements in Lantmännen Unibake, as well as the full-year result effect from Vaasan, which was acquired in June of 2015. Lantmännen Cerealia continues to develop in a stable manner, with a strong focus on developing innovative customer offers and products – several products have been launched during the year. Good synergies have been achieved through the integration of Vaasan’s operations in both Cerealia and Unibake.

The
result in
Lantmännen Real Estate
, excluding capital gains from property sales, amounts to 188 MSEK (187 MSEK). The external share of leasing has continued to increase during the year, and a number of property deals have been made – for example Lantmännen’s previous production facilities in Uppsala, which have been sold.

Three major items affecting comparability have impacted Lantmännen’s reported result for 2016. In the Food Sector, insurance compensation for the fire at the bakery in Londerzeel, Belgium, has affected the result positively by 357 MSEK, while structural costs in both Lantmännen Cerealia and Lantmännen Unibake have impacted the result negatively by 148 MSEK. In the Energy Sector, a provision of 300 MSEK has been made in the financial statements, due to the EU Commission’s ongoing investigation of Lantmännen Agroetanol and two other ethanol producers concerning alleged violations of EU competition law. Lantmännen is cooperating fully with the EU Commission.

Lantmännen’s strong result for 2016 means that the Board of Directors has decided to increase refund and final price adjustment for trade with Lantmännen Lantbruk in Sweden to 2.5 percent (2.0 last year). The Board has also decided on a 0.5 percent (0.5) refund of members’ purchases from the Machinery Sector’s Swedish operations. In total, refund and final price adjustment are estimated at 232 MSEK (188 MSEK). In addition, the Board has proposed that the Annual General Meeting decide on contribution dividend and contribution issue of 277 MSEK in total.

“Our good result means that 509 million SEK can be supplied to Swedish agriculture, for the benefit of Swedish farmers. Our strong position in the value chain from field to fork means that we can continue to develop profitable and sustainable businesses – and create conditions for thriving Swedish agriculture,” says Per Olof Nyman.

This information is information that Lantmännen ek för is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, at 08.30 CET on February 7, 2017.